Speech to International Aviation ClubWashington DC – 5th
February 2007

Ladies and Gentlemen,

The Washington International Aviation Club is known for its prestige and its
influence. So it is a great pleasure and an honour for me to be here today.

It is a particular pleasure to be here today with my colleague, Wolfgang
Tiefensee, representing the EU Presidency.

I know that for many people in the United States, the European Union appears
to be very complicated. And in many ways, you are right! The Commission... The
Court of Justice... A Parliament that meets in two different cities and a
Presidency that passes from country to country every six months. Europe is
certainly not a simple concept!

But you have two speakers in front of you today for a good reason.

Aviation is an international business where national borders make little
sense. In the past twenty years, we have worked together in Europe on safety,
security, environment and economic liberalisation. We have learnt to cooperate
on all these matters. And this week, we wanted to highlight the strength of
Europe's commitment to developing our international aviation relations with the
United States.

So make no mistake - you have two speakers - but Wolfgang and I speak with
one voice, on behalf of 27 Transport Ministers...and ultimately on behalf of
five hundred million European citizens.

Today, I would like to say a few words about the political priorities for
aviation in Europe, and of course to explain the EU's position in relation to
the air transport negotiations that will take place in Washington this week.

So let me start.

I would say that we have three main priorities in air transport policy :
Safety, Sustainability and Competitiveness.

The first priority must always be safety. The United States and Europe both
have excellent safety records that we must work to protect. In Europe, we are
working hard on this issue.

We created the European Aviation Safety Agency in 2003. Now we are in the
process of consolidating and strengthening that organisation. Over the next few
years, it will progressively become a single authority responsible for
overseeing safety across the EU.

As you will know, last year we also acted to improve the safety of European
airspace. We established a blacklist of carriers who are unsafe and who are
banned from flying to Europe. This blacklist has proven to be an excellent
incentive for airlines - and for governments - to strive to improve their
standards.

A second area of priority is sustainability. The environment - and global
warming in particular - is a growing concern among the ordinary citizens of
Europe. It also seems to be a growing concern among scientists - the report
from the "Intergovernmental Panel on Climate Change" last week brought further
indications of our planet's future.

We all know that aviation has an environmental impact, and I fully recognise
that the industry has made excellent progress in minimising the noise and
emissions it produces. But we must ensure that aviation goes further to play
its full and fair part in meeting the global environmental challenges we face.

This is why the Commission recently proposed that aviation should be included
in the EU Emissions Trading Scheme. Placing aviation within the emissions
trading system with other industries is attractive because it recognises that
transport growth can be weighed against all the other elements in our modern
lifestyle.

In effect, by including aviation in the emissions trading system, society is
asked to place a value on our holiday flights to Florida compared to the
electricity we use to heat and light our homes or compared to the emissions
created producing the products we use everyday.

It is right to put air transport into that mix and to weigh it against other
sources of emissions - and we will see what results are obtained. I suspect
that society might decide to place a very high value on the right to travel by
air.

At this stage, emissions trading for aviation is still a proposal. And while
the Member States and the European Parliament discuss the draft legislation,
Europe will of course take full account of the discussions on emissions trading
that are taking place under the authority of ICAO. At the end of the day, we
would prefer to see an international framework and we will work with the rest of
the World towards that objective.

The final priority area is the competitiveness of the aviation industry.

Europe's over-arching policy is laid down in the "Lisbon Agenda". This aims
to ensure that by 2010 Europe achieves sustainable economic growth: more and
better jobs - greater social cohesion - and proper respect for the environment.

For aviation this means creating a dynamic market for air services.

There is absolutely no doubt about the benefits that open markets can bring.
All the evidence - in Europe, in the United States, and across the World - shows
clearly that removing obstacles to free and fair competition produces benefits
for airlines, for airports, for workers, for consumers and for communities.

That is why it is so important to have a successful outcome to the EU-US
aviation negotiations.

Mrs Merkel, our German Chancellor and President of the EU, recently spoke
about "reinforcing the transatlantic link". I personally believe strongly that
this is a very important economic and political goal.

I also believe that the most immediate, concrete and visible example of a
strengthened transatlantic relationship would be an ambitious and far-reaching
EU-US air transport agreement.

The presence of Wolfgang Tiefensee here with me today shows that the EU is
committed to this process more than ever. We both want to finalise what would be
a historic agreement.

In November 2005, I thought that we had almost made it.

The negotiators from the two sides had finalised the text of a historic,
comprehensive first-stage agreement. And I say "historic" because this
agreement is not a traditional "open skies" agreement - it is much more. Let me
give you six key advances ...

1. It would replace all of the existing bilateral agreements with one,
single EU-US agreement, and would extend open skies to all 27 Member States of
the EU - for the first time, there would be free competition on every single
transatlantic route.

2. It would enable, for the first time, new co-operation arrangements
between competition authorities, to ensure compatible approaches for this global
industry.

3. It would establish, for the first time, strong co-operation and
consultation between the EU and the US in aviation security. I cannot stress
enough that this is an area where good co-operation is essential to governments
and passengers. This agreement would allow it.

4. The agreement would also, for the first time, give structure to our
co-operation in other essential fields, including air safety and
environment.

5. And it would create, for the first time, a Joint Committee that would
enable both Parties to raise and resolve any issues that may arise in relation
to the application of the agreement.

6. Finally, and very importantly, this agreement would remove the legal
uncertainty surrounding the existing bilateral agreements - so that airlines -
and alliances - could have a long term future on a legally secure basis.

In economic terms, the agreement would be a step change:

The latest estimates are that an agreement would generate more than 25
million additional passengers over the next 5 years. It would produce up to 15
billion Euros - 18 billion dollars - in benefits for consumers. It would create
80,000 new jobs in the EU and US combined.

For this reason - we should not be calling this an "open skies" agreement -
this is at least "open skies PLUS".

BUT! WE ARE NOT THERE YET. We need to push forward towards what we might
call a "superskies" agreement.

Already in November 2005, Europe made clear that it would be essential to
consider the reform of American policy on the control of airlines that had been
announced by the D.O.T. The US Administration told us that it was fully
committed to changing its policy.

So in Europe we waited.....and waited.....and waited....!

The Ministers of Transport from all 25 Member States of the EU met no less
than five times between December 2005 and December 2006.

And on each occasion the Ministers repeated that a change in US policy
towards control was an essential element for moving forward with the
agreement.

Imagine, then, our disappointment when the D.O.T. decided to withdraw its
proposal in December. This leaves us with an agreement that does not provide
the level playing field that we seek.

And why is it not a level playing field?

The answer is because Europe is ready to open its market to US airlines. We
are happy to allow US airlines to operate within the EU's internal market - But
only if there are equivalent opportunities in the American market for European
airlines. To put it very simply, this is what we are missing at the moment!

However, our goal is so ambitious we should not "throw in the towel".

I come from the same region in France as the Marquis de Lafayette. As you
may know, Lafayette is a hero not only in France, but also here in the United
States, for the part he played in the American Revolution. In 2002, Lafayette
was even made an Honorary Citizen of the United States.

(I wonder if this means the Department of Transportation would treat him as a
citizen of the United States and allow him to start an airline...?)

Lafayette was a true revolutionary - a man who would never despair, a man who
would never give up! We must be encouraged by this spirit.

So to conclude......

I know that you all share my wish that the EU-US negotiations come to a
successful conclusion.

But we do not have unlimited time! These negotiations cannot last for ever.
The transatlantic aviation market is too important to have a legally fragile
basis. If the negotiations do not succeed, the legal consequences would
threaten transatlantic aviation.

Put simply, the status quo is not an option! And failure is not an
option!

Europe is now exploring with the US, in good faith, how to find a way out of
this "impasse" - we must leave no stone unturned in our quest for a solution
that is fair to both sides - a solution that gives our airlines a fair and level
playing field.

I am confident that, with creativity and imagination, our negotiators can
find a positive result. In the spirit of Lafayette, let us work for a revolution
in EU-US aviation!